Scenario Analysis. Consider the following scenario analysis: $($LO$11-2)$

b$.$ Calculate the expected rate of return and standard deviation for each investment.

Portfolio Analysis. Use the data in the scenario analysis from Problem $13$ and consider a port$-$

folio with weights of $60$ in stocks and $\mathrm{.}40$ in bonds. $($LO$11-3)$

a$.$ What is the rate of return on the portfolio in each scenario?

b$.$ What are the expected rate of return and standard deviation of the portfolio?

c$.$ Would you prefer to invest in the portfolio, in stocks only, or in bonds only? Explain the

benefit of diversification.